EMU Year-End Accounting Review: Accrual-Based Accounting, Funds, Transfers, and Deadlines, Lecture notes of Accounting

Download EMU Year-End Accounting Review: Accrual-Based Accounting, Funds, Transfers, and Deadlines and more Lecture notes Accounting in PDF only on Docsity! YEAR-END ACCOUNTING REVIEW J U N E 4 , 2 0 1 9 USING ACCOUNT AND PROGRAM CODES • Deposits will ALWAYS go to an Account Code that starts with zero (0) • Program Code for deposits is 99 • Fund/Org/0xxx/99/Activity/Location • See the General Accounting tab on the Controller’s website for a list of account codes. https://www.emich.edu/controller/accounting/bannerfinance-ca.php ACCRUAL BASED ACCOUNTING WHAT IS ACCRUAL BASED ACCOUNTING? • In accordance with GAAP (Generally Accepted Accounting Principles), EMU is required to follow accrual based accounting. • Under the accrual basis of accounting, the focus is to report what revenues were earned and what expenses were incurred using deferrals and accruals. – A deferral occurs when EMU has: • Paid out money that should be reported as an expense in a later accounting period (ex: Subscriptions) • Received money that should be reported as revenue in a later accounting period (ex: Summer Tuition Fees) – An accrual is the means of either recording: • Revenues that have been earned, but not yet recorded or received (ex: Past due rent owed to EMU) • Expenses that have been incurred, but have not yet been invoiced or paid/recorded in the general ledger (ex: Construction project not yet invoiced) • This accounting method allows EMU’s financial statements to accurately reflect the current fiscal year revenues and/or expenses. WHY DO WE DO ACCRUAL BASED ACCOUNTING? • Although it is more complicated than the Cash Basis Method of Accounting, there are specific advantages to Accrual Based: – The ability to “match” revenues and related expenses within the applicable periods. – Creates consistency to when revenues and expenses of EMU are recorded and allows for an increased ease of budgeting and forecasting. – If EMU is looking for financing opportunities, banks and other investors usually ask for the financial information in this method of accounting. Deferred Revenue Form Prepared by: Form Definition: Deferred revenue that is recorded/received in current fiscal year that is for the next fiscal year. ¥ ¥ Caitlin Stasa Example: Summer B Tuition MICHIGAN UNIVERSITY Form Type Deferred Revenue Email to Org Financial Manager Email to General Accounting Department: busfin_generalaccounting@emich.edu Department Approval Example: Received payment for Summer 8 n before June 30th, 2019 - Moving to Date: April 01, 2019] FY20 Revenue Control Totals: 1,000.00 Enter an explanation *THIS FIELD IS REQUIRED* Increase Deferred Decrease Revenue| Revenue Next Fund Org Account| Acct. Description _| Current Fiscal Year| __ Fiscal Year Transaction Description Tuition payment to Deferred Goo00S 125051 Lose Defer Rev. Other Fees: 1000 1000 Revenue [for internal use} Eastern Michigan JENo. [Add complete? Not uploaded: 3190000 • Prepaid Expenses refers to a cost that has been incurred, but which has not yet been used. • The cost is recorded as an asset until the goods or services are used, then the cost is recorded as an expense. • Record the expense to account code A180. • Examples of Prepaids: • Software subscription • Annual membership dues • Travel (PCard) – flight booked now, taken in 6 months Prepaid Expense Form Form Defi n: Prepaid expense that has been incurred, but Prepared by: not yet consumed. Caitlin Stasa Example: PCard Travel MICHIGAN UNIVERSITY Form Type Prepaid Expense Email to Financial Org Manager Email to General Accounting Department: bustin_generalaccounting@emich.edu Department Approval Example: Booked a flight for a conference 7 Date October 14,2019 months in sdvance ‘Control Totals 1,200.00 Enter an explanation *THIS FIELD IS REQUIRED* Decrease Travel | Increase Prepaid Expense Current | Expense Current Fund Org Account| Acct. Description Fiscal Year Fiscal Year Transaction Description go0005, 125051 A180 Prepaid Expense 1200 1200 PCard Travel Expense Eastern Michigan JENo. (for internal use) 11960012 Add complete? Not uploaded Expense Accrual Form Form Definition: To record an expense that has been incurred, Prepared by: but not yet paid. Caitlin Stasa Example: Salaries MICHIGAN UNIVERSITY Form Type Expense Accrual Email to Financial Org Manager Email to General Accounting Department: busfin_generalaccounting@emich.edu Department Approval Example: Setting up an expense accrual for a catering expense incurred on 06/29/2019, but has not been Date June 30, 2019 invoiced or paid. Control Totals $ 2,500.00 Enter an explanation *THIS FIELD IS REQUIRED* Increase Accrued Decrease Salaries |Expense Prior Fiscal Fund Org Account| Acct. Description |Current Fiscal Year Year Transaction Description 600005 107650 1280 | Clerical Secretarial UAW 2500 2500 BW15 Pay period accrual (for internal use) [Add complete? Not uploaded Eastern Michigan JE No.  YEAR END DEADLINES Dates To Remember June? dune 14 June 27 June 28 June 28 July 3 July 8 July July 11 July 15 July 16 Deadline for all wage and non-wage adjustments Deadline for corrections of all open encumbrances; Recommended deadline for F¥19 payment card purchases; Recommended deadline for P¥19 elnvoice requests Deadline for purchases NOT requiring bid Deadline for Check Deposits in Cashier's Office Deadline for all budget transfers, journal vouchers, and internal charges; Deadline for all payroll leave reports through June 30, 2019 must be submitted and approved for AP, AC and ES staff Deadiine for all Concur expense reports First close 3:00pm First close statements available on e-print Deadline for all June corrections Final close 3:00pm Final close statements available on €-print